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Impact of New COVID-19 Mandates on Government Contractors

Litigation Alert

On September 9, 2021, President Biden signed two executive orders establishing new workplace safety requirements for federal employees, contractors, and subcontractors as part of the administration's continued efforts to combat the spread of COVID-19. One executive order enacts a vaccine mandate for all federal employees and the other establishes new requirements for contractors and subcontractors working on or in connection with federal contracts. The executive orders accompany the unveiling of the Biden administration's extensive, six-pronged Path Out of the Pandemic: President Biden's COVID-19 Action Plan (Action Plan) and indicate an escalation in the White House's previous approach to COVID-19 safety requirements for federal contractors and subcontractors.

Background

On January 20, 2021, President Biden signed the Executive Order on Protecting the Federal Workforce and Requiring Mask-Wearing, which established the Safer Federal Workforce Task Force (Task Force). The purpose of the Task Force is to "provide ongoing guidance to heads of agencies on the operation of the Federal Government, the safety of its employees, and the continuity of Government functions during the COVID-19 pandemic." On July 29, 2021, the Task Force released the COVID-19 Workplace Safety: Agency Model Safety Principles, which required federal employees and on-site contractors to attest to their COVID-19 vaccination status or be subject to workplace requirements while on federal property, such as wearing a mask, socially distancing themselves from other employees, participating in weekly or twice-weekly COVID-19 testing, and complying with certain official travel restrictions. 

Executive Order on Requiring Coronavirus Disease 2019 Vaccination for Federal Employees

In response to the spread of the Delta variant of COVID-19, President Biden signed the Executive Order on Requiring Coronavirus Disease 2019 Vaccination for Federal Employees (Federal Employee Executive Order), which mandates the vaccination of all federal employees, on September 9, 2021. Within seven days of the Order, the Task Force is required to issue guidance on agency implementation of this new requirement. Notably, the only exceptions to the mandatory COVID-19 vaccination will be those "required by law." This is a departure from previous guidance set forth by the Task Force in July, which allowed for an effective opt-out of vaccination if federal employees or on-site contractors complied with heightened requirements.

Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors 

Also signed on September 9, 2021, the Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors (Federal Contractors Executive Order) seeks to address the ongoing spread of COVID-19, and its impact on the procurement system, by "ensuring that the parties that contract with the Federal Government provide adequate COVID-19 safeguards to their workers performing on or in connection with a Federal Government contract or contract-like instrument." The Federal Contractors Executive Order requires that contractors and subcontractors "working on or in connection with a Federal Government contract or contract-like instrument" comply with federal COVID-19 safety protocols in the workplace. 

Implementation

Effective "immediately," covered federal contracts entered into on or after October 15, 2021, must include a clause stating that "the contractor or subcontractor shall, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by [the Task Force]." The clause covers all workplace locations, as designated by the Task Force, "where an individual is working on or in connection with a Federal Government contract or contract-like instrument."

The meaning of these requirements is currently at least somewhat unclear. However, by September 24, 2021, the Task Force must release relevant definitions, explanations of protocol requirements, and exceptions to the protocol requirements as applied to workplace locations. Before the Task Force guidance is published, the Director of the Office of Management and Budget (OMB) must make an affirmative determination that the guidance "will promote economy and efficiency in Federal contracting."

Following the Task Force's publication of guidance, the Federal Acquisition Regulatory Council (FAR Council) must amend the Federal Acquisition Regulation (FAR) to include a clause implementing the new requirement and, by October 8, 2021, begin to roll out policy direction to agency procurement offices on allowable class deviations from the requirement under FAR 1.4.

The Federal Contractors Executive Order does not subject contractors and subcontractors to any immediate requirements, such as a mandatory vaccination mandate. However, the White House has indicated that it will expect contractors and subcontractors working on or in connection with federal contracts to comply with the same standards it has established for federal employees. A blog post from the Office of Management and Budget (OMB) on the Federal Contractors Executive Order states that, "[I]f you want to do business with the Federal Government, you must vaccinate your workforce." Therefore, contractors and subcontractors should stay vigilant in reviewing the clarifications released by the Task Force and begin to anticipate new costs in compliance with the guidance. 

Applicability of the Clause

While many questions remain as to the scope of the COVID-19 protocol requirements that will be encapsulated by the clause to be set forth in the FAR, there is more clarity surrounding the contract types and vehicles that the clause covers. The Federal Contractors Executive Order applies to new contracts and contract-like instruments, solicitations for a contract or contract-like instrument, extensions or renewals of existing contracts or contract-like instruments, and certain option exercises on existing contracts for:

  • Contracts for the procurement of services, construction, or leases of real estate
  • Contracts for services covered by the Service Contract Act
  • Contracts for concessions, including contracts for concessions that are excluded from Department of Labor (DOL) regulation
  • Contracts in connection with federal property or lands and related services for federal employees, their dependents, or the public

Notably, exempt from the Federal Contractors Executive Order are:

  • Grants
  • Contracts with Indian Tribes
  • Contracts and subcontracts that fall under the Simplified Acquisition Threshold (currently $250,000 per FAR 2.101)
  • Work performed outside of the United States
  • Subcontracts exclusively for the acquisition of products

While the Federal Contractors Executive Order specifically targets new procurement activity, existing contracts may still be impacted, as "agencies are strongly encouraged, to the extent permitted by law, to ensure that the safety protocols required under [existing] contracts and contract-like instruments are consistent with the requirements." As such, contractors and subcontractors should anticipate that agencies may request contract modifications to include the new clause language. In reviewing the modifications, contractors and subcontractors should consider the increased costs of compliance, changes to staffing or protocol, and potential adjustments to ongoing operations before signing. 

Other Initiatives

While contractors and subcontractors should be attentive to COVID-19 requirements specific to their field, they should also be conscious of more generalized requirements that they might be subject to under President Biden's COVID-19 Action Plan. Two initiatives under the "Vaccinate the Unvaccinated" prong of the Action Plan are notable:

  • The DOL's Occupational Safety and Health Administration (OSHA) is in the process of developing a rule that "will require all employers with 100 or more employees to ensure their workforce is fully vaccinated" or require weekly testing for those who are unvaccinated. 
  • OSHA will issue a rule requiring employers to "provide paid time off for the time it takes for workers to get vaccinated" or recover from vaccination side effects. 

Conclusion

The true scope of the compliance requirements under the Federal Contractors Executive Order will not become clear at least until the Task Force publishes clarifications on September 24, 2021. However, the scope of the president's COVID-19 Action Plan and the simultaneous release of the Federal Employee Executive Order mandating vaccines for federal employees indicate that federal contractors and subcontractors will soon be subject to increased safety protocols for workplaces where federal contracts are being performed. We will continue to monitor and report on the developments in COVID-19-related requirements for contractors and subcontractors. In the meantime, if you have questions about the COVID-19 safety requirements for federal contractors and subcontractors, please contact one of the Miller & Chevalier attorneys listed below.

Jason N. Workmaster, jworkmaster@milchev.com, 202-656-5893

Alex L. Sarria, asarria@milchev.com, 202-626-5822

Sarah Barney, a law clerk in the government contracts group, contributed to this client alert.



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